- Charges brought by the US Department of Justice against Tornado Cash co-founders accuse the defendants of conspiracy to commit money laundering.
- Tornado Cash co-founders’ indictment potentially criminalizes software code publication, according to a crypto advocacy group.
- The criminalization of software codes could have long-standing effects on several crypto projects.
The US Department of Justice (DOJ) brought charges against Tornado Cash and co-founders Roman Storm and Semonov with unlicensed money transmission.
Crypto advocacy group, Coin Center, came out in support of Tornado Cash, stating that the claims against Tornado Cash co-founders likely criminalize software code publication. This may not align with the Financial Crimes Enforcement Network (FinCEN) guidelines issued in 2019.
The claims against Tornado Cash are likely to have ripple effects in the crypto ecosystem, since Ethereum smart contracts are code, just like Tornado Cash, a crypto mixer that works for Ether and ERC-20 tokens.
Also read: Bankrupt FTX to pay creditors in dollars as it plans to liquidate $3 billion in crypto
Crypto advocacy group supports Tornado Cash against DOJ claims
Coin Center, a non-profit focused on policy issues facing cryptocurrencies, recently voiced its support for Tornado Cash co-founders. The DOJ claims that Semenov and Storm were involved in money laundering to the tune of $1 billion for hackers like North Korea’s Lazarus Group.
The indictment against the defendants says Tornado Cash co-founders are engaged in the business of transferring funds on behalf of the public, without registration with the FinCEN. However, Coin Center argues that the activities described in the indictment seem more related to software provision and communication services than money transmission.
According to Coin Center’s Research Director, Peter Van Valkenburgh, the indictment against Tornado Cash co-founders likely criminalizes software code publication.
Coin Center interprets FinCEN's guidance and explains that an anonymizing software provider is not a money transmitter.
The indictment against Tornado Cash likely poses a threat to smart contracts on Ethereum
The Ethereum website defines smart contracts as “computer programs stored on the blockchain.” Criminalization of software code publishers could cause a stir in the community of smart contract developers and publishers on the Ethereum blockchain.
It will be key how US financial regulators address this matter as the Securities and Exchange Commission (SEC) is currently engaged in lawsuits against crypto exchanges and firms, debating whether the assets traded on their platforms are securities. Further, there is speculation that the SEC is likely to approve Ethereum Futures ETFs ahead of Bitcoin. Find out more about it here.
Regulators need to clarify their stance on whether software code publication can be criminalized, before key decisions are made in crypto-related cases in the US. Coin Center urged the US Congress to provide more precise crypto regulation.
Cryptocurrency metrics FAQs
What is circulating supply?
The developer or creator of each cryptocurrency decides on the total number of tokens that can be minted or issued. Only a certain number of these assets can be minted by mining, staking or other mechanisms. This is defined by the algorithm of the underlying blockchain technology. Since its inception, a total of 19,445,656 BTCs have been mined, which is the circulating supply of Bitcoin. On the other hand, circulating supply can also be decreased via actions such as burning tokens, or mistakenly sending assets to addresses of other incompatible blockchains.
What is market capitalization?
Market capitalization is the result of multiplying the circulating supply of a certain asset by the asset’s current market value. For Bitcoin, the market capitalization at the beginning of August 2023 is above $570 billion, which is the result of the more than 19 million BTC in circulation multiplied by the Bitcoin price around $29,600.
What is trading volume?
Trading volume refers to the total number of tokens for a specific asset that has been transacted or exchanged between buyers and sellers within set trading hours, for example, 24 hours. It is used to gauge market sentiment, this metric combines all volumes on centralized exchanges and decentralized exchanges. Increasing trading volume often denotes the demand for a certain asset as more people are buying and selling the cryptocurrency.
What is funding rate?
Funding rates are a concept designed to encourage traders to take positions and ensure perpetual contract prices match spot markets. It defines a mechanism by exchanges to ensure that future prices and index prices periodic payments regularly converge. When the funding rate is positive, the price of the perpetual contract is higher than the mark price. This means traders who are bullish and have opened long positions pay traders who are in short positions. On the other hand, a negative funding rate means perpetual prices are below the mark price, and hence traders with short positions pay traders who have opened long positions.
Like this article? Help us with some feedback by answering this survey:
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Ethena plans to leverage USDe to integrate DeFi, CeFi and traditional finance
Ethena (ENA), a protocol developed on the Ethereum blockchain offering a synthetic stablecoin (USDe) that operates across various DeFi applications, announced on Friday that itsUSDe will integrate DeFi, CeFi and traditional finance as part of its 2024 roadmap.
XRP hovers above $0.50 as Ripple joins alliance to simplify recovery of digital assets
XRP trades around $0.5174 early on Friday, wiping out gains from earlier in the week, as Ripple announced it has joined an alliance to support digital asset recovery alongside Hedera and the Algorand Foundation.
Toncoin price surges as Notcoin gains attention across the crypto community
TON saw a brief rally on Thursday following a recent announcement that Binance and OKX will launch Notcoin (NOT) as the newest token on the Binance launchpool and the OKX Jumpstart.
AI crypto coins rally ahead of ChatGPT creator OpenAI plans to announce Google search competitor on Monday
Barely before the hype around NVIDIA stock gain is over, AI crypto tokens have another bullish catalyst coming their way, which could provide more tailwinds to drive the price of the sector’s tokens.
Bitcoin: Why BTC is close to a bottom
Bitcoin (BTC) price efforts of a recovery this week have been countered by selling pressure during the onset of the American session. However, the downside potential appears to have been capped. Markets have noted significant trading differences between sessions, and while the Asian market showed strength, whatever ground they were able to cover was oftentimes wiped out by traders in the US.